HB 1249

26.510.23  101st Legislative Session  1249
                                     2026 South Dakota Legislature
                                              House Bill 1249
                                                    ENROLLED
                                              AN ACT
ENTITLED      An    Act   to   amend      provisions     pertaining   to   the   School   Finance
         Accountability Board, and the process by which a recommendation of the
         board is approved.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 1-45-38 be AMENDED:
            1-45-38. There is created the School Finance Accountability Board within the
   Department of Education. The board consists of five members appointed by the Governor.
   The members shall serve a term of four years.
            A school district may request that the School Finance Accountability Board waive
   any reduction to the district's state aid for general education, imposed under § 13-13-
   73.5, or the penalty imposed upon a school district, pursuant to § 13-13-73.9.
            The board may:
   (1)      Reduce a school district's state aid for general education, as provided in § 13-13-
            73.5;
   (2)      Impose the penalty, as provided in § 13-13-73.9, upon a school district for failing
            to comply with § 13-13-73.6 or 13-13-73.8;
   (3)      Require a review of the school district's accreditation if:
            (a)     The district's lowest general fund monthly cash balance exceeds the
                    district's allowable general fund cash balance; or
            (b)     The district has failed to comply with § 13-13-73.6 or 13-13-73.8; or
   (4)      Waive, in whole or in part:
            (a)     The reduction to a school district's state aid for general education required
                    under § 13-13-73.5, if the district demonstrates that the lowest monthly
                    general cash fund balance exceeded the allowable general fund cash
                    balance as the result of special circumstances; or
26.510.23  2  1249
            (b)   A penalty imposed upon a school district by § 13-13-73.9, if the district
                  demonstrates that the district's failure to comply with § 13-13-73.6 or 13-
                  13-73.8 was the result of special circumstances.
            The board may condition any waiver granted to a school district pursuant to
   subsection (4)(a) upon the school district's annual lowest general fund monthly cash
   balance equaling an amount less than the district's allowable general fund cash balance,
   for at least three years. If the school district's lowest general fund monthly cash balance
   exceeds the district's allowable general fund cash balance at any point during the three
   years, the board may rescind the waiver and impose the penalty required under § 13-13-
   73.5.
            The board may condition any waiver granted to a school district pursuant to
   subsection (4)(b) upon the school district increasing the district's average teacher
   compensation in accordance with § 13-13-73.6 and paying each full-time equivalent
   teacher a salary equal to the state minimum salary, as defined in § 13-13-73.8, for at
   least three years. If a school district fails to increase the district's average teacher
   compensation or fails to pay each full-time equivalent teacher a salary equal to the state
   minimum salary at any point during the three years, the board may rescind the waiver
   and impose the penalty required under § 13-13-73.9.
            The School Finance Accountability Board shall promulgate rules, pursuant to
   chapter 1-26, to establish the process by which a school district may request a waiver,
   pursuant to this section, and the factors that the board may consider in granting a waiver
   request from a school district. The factors must address the impact of employee
   retirements on the district.
            The Department of Education shall annually report to the Governor and the
   Legislature the information collected pursuant to §§ 13-8-47 and 13-13-73.6.
Section 2. That § 13-13-73.5 be AMENDED:
            13-13-73.5. If a school district's lowest general fund monthly cash balance
   exceeds the district's allowable general fund cash balance, the Department of Education
   shall reduce a school district's state aid for general education, as calculated pursuant to
   § 13-13-73, by an amount equal to the difference of the district's allowable general fund
   cash balance subtracted from the district's lowest general fund monthly cash balance. If
   the difference is less than zero, the reduction to the district's state aid for general
   education is zero.
HB1249 ENROLLED
26.510.23  3  1249
            A school district created or reorganized after July 1, 2016, is exempt from the
   reduction provided by this section for a period of three years immediately following its
   creation.
Section 3. That § 13-13-73.9 be AMENDED:
            13-13-73.9. The Department of Education must decrease state aid to general
   education funding to the school district in the following fiscal year by five hundred dollars
   for each full-time equivalent teacher employed in the school district if:
   (1)      The school district does not increase the school district's average teacher
            compensation in accordance with § 13-13-73.6; or
   (2)      The school district does not pay each full-time equivalent teacher a salary at least
            equal to the state minimum salary as defined in § 13-13-73.8.
HB1249 ENROLLED
26.510.23  4  1249
An Act to amend provisions pertaining to the School Finance Accountability Board, and the
process by which a recommendation of the board is approved.
                                                     Received at this Executive Office
 I certify that the attached Act originated in       this _____ day of _____________,
 the:
                                                     2026 at ____________M.
 House as Bill No. 1249
                                                     By
                     Chief Clerk of the House  for the Governor
                                                                      The attached Act is hereby
                                                                  approved this ________ day of
                          Speaker of the House  ______________, A.D., 2026
 Attest:
                                                                                        Governor
                     Chief Clerk of the House
                                                     STATE OF SOUTH DAKOTA,
                                                                                               ss.
                                                     Office of the Secretary of State
                       President of the Senate
                                                                    Filed ____________, 2026
 Attest:  at _________ o'clock __M.
                       Secretary of the Senate  Secretary of State
 House Bill No. 1249  By
 File No. ____  Asst. Secretary of State
 Chapter No. ______
HB1249 ENROLLED